We recently prosecuted a horrific car accident case involving personal injuries and multiple wrongful deaths. Unfortunately, the responsible driver only carried the minimum limits of coverage. This is a problem that we see too often.
In this case, we were fortunate to be able to make claims with our client’s insurance carriers for underinsured/uninsured motorist coverage and medical payments coverage.
However, many drivers only carry the minimum insurance required by their state. If that had been the case for our client, we would not have been able to get them anywhere near the compensation we secured because we would have been limited to the minimum limits carried by the at-fault driver.
Alabama Mandatory Liability Insurance
Alabama has a mandatory liability insurance law that requires drivers to have liability insurance at a state-mandated minimum coverage amount. Liability insurance pays others when you are “at fault” for a car accident that causes bodily injury or property damage.
Minimum liability coverage in Alabama is 25/50/25. Here’s the breakdown:
- $25,000 bodily injury per person pays for injuries and lost wages you cause to another driver or their passenger(s) up to $25,000 per person
- $50,000 bodily injury per accident, which is the most your insurer will pay for injuries and lost wages if more than two people are injured in an accident
- $25,000 property damage per accident covers damage caused to another driver’s vehicle
The mandatory liability insurance only sets the minimum amount of coverage you must carry by law. However, you are more than welcome to carry a more full coverage policy.
Full coverage car insurance is not an official kind of insurance. It describes a policy that protects the insurance holder and their vehicle most of the time. Typically, this includes mandatory liability insurance plus comprehensive and collision insurance.
Do you have enough auto insurance?
You are most likely underinsured if you only have liability insurance with minimum coverage amounts. This is because, unfortunately, the minimum coverage may not be enough to pay for all the harm suffered in some wrecks.
If you are the at-fault driver, the cost of injuries to other parties could quickly soar past the $25,000 coverage of your liability insurance, leaving you paying the difference out-of-pocket. Furthermore, liability coverage does not pay for your injuries or damages to your vehicle.
If you’re not at fault, your insurance coverage can protect you if the person responsible for the accident is uninsured or underinsured (like it did for the client we mentioned at the beginning of the blog).
Increasing Your Liability Policy Limit
When considering increasing your auto insurance coverage, you need to consider the value of all your assets to decide how much liability coverage is necessary to protect you and your family.
Someone injured in a car accident does not have to accept policy limits to settle their claim. If their claim exceeds your liability policy limits, the injured person could seek a judgment against your assets, including your wages, home, real estate, investment or retirement accounts, and other possessions.
Should you choose to increase your liability policy limit, insurance carriers typically offer policies with per-person bodily injury limits of $25,000, $50,000, $100,000, $250,000, and higher.
Optional Insurance Coverage Options
Beyond increasing your liability coverage, itis also wise to have additional coverages to protect your assets. A few optional coverages include collision, comprehensive, uninsured/underinsured motorist, medical, rental, roadside, and gap coverage.
Collision Coverage covers damages to your vehicle caused by an accident with another vehicle or object, regardless of who is at fault. In most policies, you’ll need to pay a deductible of about $250-$500 (although it can be more) before your collision coverage kicks in. Collision coverage typically only covers the cost of repair or replacement for the damaged vehicle, not the loss or diminution of value due to the damage.
Comprehensive Coverage protects your vehicle in the event of theft, fire, flood, animals, falling objects or vandalism.
Uninsured/Underinsured Motorist helps cover expenses if you’re injured by a driver who does not have insurance or does not have enough insurance. This may be the most important type of coverage to consider adding. It applies to all occupants of your vehicle and can even be available to you if you are injured while riding in someone else’s vehicle.
Loan/Lease Payoff or Gap Coverage manages the difference between your vehicle’s cash value and the amount still owed on the car loan if your vehicle is totaled.
Medical Payments Coverage covers you and your passenger’s medical payments regardless of who was at fault in the wreck or in the event of a single-vehicle crash. You can often use medical payments coverage to pay out-of-pocket medical expenses or copayments. Unfortunately, this coverage is often limited to $1,000, $2,000, or $5,000. However, some carriers can cover up to $100,000.
It is important to note that you can only use medical payments coverage to pay for medical bills—it does not provide compensation for lost income, pain and suffering, or mental anguish.
Rental car coverage helps with the cost of a car rental until your vehicle is repaired.
Roadside assistance provides battery jump starts, flat tire repair, and towing expense assistance.
Be mindful that when adding additional coverages, there are varying deductibles and coverage amounts. These factors can increase the monthly premium cost.
Driving Without Insurance in Alabama
The Insurance Research Council study lists Alabama as the state with the seventh-worst rate of uninsured motorists. If you are involved in an accident or stopped for traffic violations, you will face penalties if you do not have insurance.
Driving without insurance is a misdemeanor that carries a fine of $500 to $1000. It can result in your license and registration being suspended for at least six months and potentially having your vehicle impounded. Following a suspended license, you’ll have to pay a $200-$400 reinstatement fee, and you may have to prove you are currently insured before you’re allowed to drive again. In some circumstances, you can even earn up to six months of jail time.
What to Do if You're Underinsured
You may not be able to predict when an accident will happen, but you can be prepared for the financial impact afterward. The right amount of insurance means the difference between substantial out-of-pocket costs or a simple claim submission to your insurance company.
We encourage you to meet with your insurance agent and review your automobile insurance policy to learn the type and limits of your current policy and the cost of increasing your coverage. Higher coverage is often not as expensive as people might think. If you are seriously injured in an automobile wreck, the last thing you want to learn is that there is no insurance coverage because you wanted to reduce your premiums.
If you have been injured in a motor vehicle accident, please contact the experienced attorneys at Timberlake & League. We have years of experience making negligent motorists and problematic insurance companies pay what they owe.